Brexit brain drain is only making skills shortage worse

UK is not as attractive to EU workers - but the problems start much closer to home

Jaguar Land Rover car factory
Jaguar Land Rover factory in Solihull
(Image credit: Oli Scarff/Getty Images)

More evidence has emerged attesting to a chronic UK skills shortage - one that has put a price on the gap for employers at more than £2bn in the past year.

It is nothing new: there has been talk of a shortage of workers with the required skills to fill the vacancies at UK employers for years and especially since unemployment began to fall steadily during the coalition years.

The problem is often also linked to the wider and more pernicious issue of the UK economy's poor productivity, which is ultimately a big drag on wages.

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Generally now reporters link the skills gap to Brexit, pointing to figures showing that fewer EU citizens want to come to Britain to work - or that more who are here already could leave.

Quantifying the gap

The new research was carried out by the Open University among 400 firms and that found nine in ten companies had struggled to hire workers with the required skills in the past year.

"They estimated the extra costs from recruitment fees and hiring temporary staff as 'at least' £1.7bn," says The Guardian. "They put the cost of inflating salaries to above the market rate in order to fill roles at £527m."

On the point of salary inflation, the study found that 56 per cent of employers had needed to pay more to tempt skilled workers to fill vacancies, at an average cost of £4,150 per hire for small and medium-sized firms and £5,575 for larger organisations.

According to a report in May from the Recruitment and Employment Confederation, shortages exist across "scores of different jobs, from engineering and accounting to hospitality and caring", says the Daily Telegraph.

It found the shortage is "most intense in the engineering sector".

There is plenty of evidence to support this: employer-led engineering skills organisation Semta reckons Britain needs 1.8 million new engineers by 2025.

Visa Bureau's list of UK occupations in such shortage that employers do not need to advertise their vacancies is dominated by engineering roles, which accounts for in excess of 50 individual occupations on the list.

It's not just Brexit

Brexit is apparently set to make the skills gap much worse.

A study by Deloitte found as many as 47 per cent of skilled EU workers in Britain could leave the country as a result of the fallout from Brexit, while there have been widespread reports of fewer EU migrants applying to fill skilled roles.

Labour problems related to Brexit typically focus on the low-skilled workers who, for example, pick the vast majority of the fruit and veg grown in the UK - but it seems the issue also affects higher-paid skilled workers.

Where skilled jobs are concerned, however, the problem begins closer to home and EU workers were only, in the words of the Telegraph, "plugging the gap".

Unemployment in the UK - the number of people available and looking for work - is currently around 1.5 million and proportionally at the lowest rate for more than 40 years.

There are 767,000 vacancies for roles in the UK. Although there are more people out of work than there are jobs available, that the surplus ratio is so low suggests the economy is near full employment and that the skills of those out of work will match those needed.

So in short we have a shortage of people coming through from school and university with the right skills.

Starting young

That is certainly the view of Semta, which says that pupils are not encouraged to consider engineering as an occupation while at school and that work experience opportunities are too limited.

Separate research from the Institution of Mechanical Engineers suggests the UK education system is not turning out workers with the skills employers need, and 63 per cent of engineers believe the skills shortage will grow in the years ahead.

If the problem really does start at school, then it seems that efforts to engage people at younger ages with the possibilities in sectors with a skills gap will be part of the solution.

How we teach children beyond secondary school is another key aspect: focusing more on vocational courses and changing teaching methods for all further and higher education routes.

The Guardian says "current vocational education and training systems... are rooted in the requirements of specific occupations" and need to "move away from teaching functional skills that are outdated almost as soon as they are learned".

Instead it points to examples where higher education institutions, employers and government agencies "form regional alliances that address local skills needs" across sectors rather than in specific jobs.

Easier said than done, of course, but as good as place as any to start.

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